Are there any rules about what I can do with the sound for the reimagined ‘memory’ version?
No – only that the reimagined/remixed version must be composed from or contain the original sound sample in some form. Some sounds are made entirely from the original sample with no external sounds, just manipulation and/or layering of the original – others are musical/tonal compositions that merely contain the original sound in some form. Musical, experimental, subtle or abstract – it’s your reimagining of the sound that’s important. There’s a good summary of some of the many creative approaches other artists have taken to reimagining sounds here.